Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

HBOS in desperate rescue talks

17 September 2008 / by Rebecca Sargent

The owner of the UK's largest mortgage lender, Halifax is reportedly in urgent takeover talks as its shares fall to record lows as the aftershock from the collapse of Lehman Brothers hits the UK.

Shares in HBOS fell by 41 per cent yesterday and currently stand at around 178p, down from 299p last week. Shareholders are panicking in a bid to shift the dwindling stock and HBOS and the Financial Services Authority (FSA) have been forced to issue confidence statements.

The FSA said: "We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way."

However, it seems that the statements could not bring the lender back from the damage done by credit rating agency Standard and Poor's, which brought the bank's ability to cope into question, and has done nothing to boost consumer confidence.

Since then HBOS has reportedly been urgently seeking potential supporters should it buckle under the strain of a falling stock market. According to reports, only 60 per cent of its funding comes from depositors, meaning the bank is heavily reliant on the money markets which could soon spell disaster.

Rivals HSBC and Lloyds TSB have been named as potential takeover bids should HBOS need it. A merger with either of the two would create a dominating banking giant in the UK.

The impact of the collapse of Lehman Brothers and AIG in the US is immeasurable in the UK as experts believe savings, pensions and mortgage will all take a blow. The inter bank lending rate (LIBOR) has soared from 5.5 per cent 6.8 per cent as banks focus on their own liquidity in attempts to remain strong and avoid doing an HBOS.

HBOS last had a scare in March when its share price fell dangerously low and the FSA was forced to issue an emergency statement. However, that time was a result of foul play, whereas today it seems HBOS really is struggling to stay afloat.

Two in five UK households bank with HBOS, but savers are being advised to hold tight rather than panic withdraw as the Government's safety net guarantees the first £35,000 in a savings account.